Hanmi Financial Corporation Reports
Fourth-Quarter and Fiscal Year 2009 Financial Results
LOS ANGELES – January 28, 2010 – Hanmi Financial Corporation (NASDAQ: HAFC) (“we,” “our” or “Hanmi”), the holding company for Hanmi Bank (the “Bank”), reported a fourth-quarter net loss of $35.9 million, or ($0.70) per share, primarily driven by $77 million in credit loss provisions, compared to a net loss of $3.8 million, or ($0.08) per share, in the comparable period a year ago.
For the year ended December 31, 2009, Hanmi reported a net loss of $122.3 million, or ($2.57) per share, mainly due to $196.4 million in credit loss provisions, compared to a net loss of $102.1 million, or ($2.23) per share, for the year ended December 31, 2008. In 2008, there was a non-cash impairment loss on goodwill of $107.4 million, for which there was no comparable loss in 2009.
“Over the past year, we achieved a number of positive changes in what continues to be a very difficult economic environment,” said Jay S. Yoo, Hanmi’s President and Chief Executive Officer. “Most notably, we have made significant progress in strengthening our loan monitoring and loan review departments, maintaining appropriate loan loss reserves in anticipation of asset deterioration, managing our liquidity, and enhancing our net interest margin.”
“Notwithstanding these improvements, our focus during the first half of 2010 will be to fully comply with previously announced regulatory requirements by further strengthening our capital position, improving asset quality, and enhancing liquidity. Our highest priority during the next few months will be to raise sufficient capital, executing our strategic plan to comply with regulatory requirements.
“To enhance liquidity, we will continue our efforts to reduce our illiquid assets as well as further increase our core deposits through product features and upgraded customer service. With the expectation of substantial progress in achieving these goals along with a successful capital raise,” concluded Mr. Yoo, “we will strive to be back in position for organic growth.”
Results of Operations
Net interest income before provision for credit losses increased by $1.9 million, or 7.3 percent, to $28.4 million in the fourth quarter of 2009 as compared with $26.5 million in the prior quarter as the $1.9 million decrease in interest and fees on loans was more than offset by a $4.5 million decrease in total interest expense. For the full year 2009, net interest income before provision for credit losses decreased by $33.2 million, or 24.7 percent, to $101.2 million, as compared with $134.4 million in the prior year.
The average yield on the loan portfolio was 5.54 percent in the fourth quarter of 2009, an increase of four basis points compared to 5.50 percent in the third quarter. Thanks to our proper management of high-cost time deposits that were offered through early 2009 and matured in the fourth quarter, combined with an overall decline of deposit rates in our community, the cost of average interest-bearing deposits was 2.26 percent, a decrease of 44 basis points

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compared to 2.70 percent in the third quarter. Consistent with this trend, net interest margin was 3.46 percent in the fourth quarter of 2009, an increase of 46 basis points compared to 3.00 percent in the third quarter.
The provision for credit losses in the fourth quarter of 2009 increased by $27.5 million to $77.0 million, compared to $49.5 million in the prior quarter, due mainly to the increase in our historical loss ratios used in the allowance for loan losses migration analysis which was the result of our increase in charge-offs in recent quarters. The charge-offs of impaired loans for the deficiency of collateral in this weakening commercial real estate (“CRE”) market also contributed to the increase. For the full year, the provision for credit losses was $196.4 million compared to $75.7 million in 2008.
Total non-interest income in the fourth quarter of 2009 was $7.8 million as compared with $8.2 million in the third quarter of 2009 and $7.4 million in the fourth quarter of 2008. The decrease in non-interest income from the third quarter is mainly attributable to the overall decrease in service charges in the slowed economy. Consistent with our balance sheet deleveraging strategy, we continued to sell SBA loans and recognized a $354,000 gain in the fourth quarter, as compared with $864,000 in the prior quarter. In the fourth quarter, we also sold investment securities, mainly municipal bonds, for risk management purposes, and recorded a net gain of $665,000. For the full year 2009, total non-interest income was $32.1 million, a decrease of $39,000, or 0.1 percent, from the prior year.
Total non-interest expense in the fourth quarter of 2009 was $22.7 million as compared with $23.7 million in the third quarter, a decrease of $979,000, or 4.1 percent, from the prior quarter. A major contributor to the sequential decrease in fourth-quarter non-interest expense was a decrease of $2.5 million in other real estate owned expenses, partially offset by an increase of $1.0 million in deposit insurance premiums and regulatory assessments. For the full year 2009, total non-interest expense was $90.4 million compared to $194.3 million in 2008. The 2008 expense included a $107.4 million impairment loss on goodwill.
With the aforementioned decreases in non-interest expense and non-interest income and the increase in net interest income before provision for credit losses, the fourth-quarter 2009 efficiency ratio (non-interest expense divided by the sum of net interest income before provision for credit losses and non-interest income) was 62.6 percent, as compared with 68.2 percent in the third quarter and 55.5 percent in the comparable period a year ago.
Balance Sheet and Asset Quality
Reflecting the Bank’s ongoing program to de-leverage the balance sheet, at December 31, 2009, total assets decreased by $294.8 million, or 8.5 percent, to $3.16 billion as compared with $3.46 billion at September 30, 2009, and decreased by $713.1 million, or 18.4 percent, in comparison to $3.88 billion at December 31, 2008.
Gross loans, net of deferred loan fees, decreased by $158.4 million, or 5.3%, to $2.82 billion as of December 31, 2009, compared with $2.98 billion at September 30, 2009, and decreased by $543 million, or 16.2%, as compared with $3.36 billion at December 31, 2008. The bulk of the decrease relative to the prior quarter-end is attributable to the stringent lending policy implementing selective loan renewals in addition to sale of loans and charge-offs.

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Total deposits decreased by $242.5 million, or 8.1 percent, to $2.75 billion at December 31, 2009 compared to $2.99 billion at September 30, 2009, and decreased by $320.8 million, or 10.4 percent, compared to $3.07 billion at December 31, 2008. The decrease in total deposits compared to the previous quarter-end reflects a reduction in brokered deposits of $188.4 million and a reduction in Freedom CDs of $114.3 million. FHLB advances also decreased by $6.8 million.
Fourth-quarter charge-offs, net of recoveries, were $57.3 million compared to $29.9 million in the prior quarter and $18.6 million in the fourth quarter of 2008. Fourth-quarter charge-offs include a partial charge-off in the amount of $4.6 million on a construction loan to a senior housing project as a result of a decrease in collateral value; investment property loan charge-offs totaling $13.5 million; and other commercial term loan charge-offs totaling $30.3 million, which includes partial charge-offs from owner-occupied and single-tenant property loans. The remaining charge-offs of approximately $9 million consist of consumer, international, and SBA loans as well as commercial lines of credit. For the full year 2009, charge-offs, net of recoveries, were $122.6 million compared to $46.0 million in 2008.
At December 31, 2009, the allowance for loan losses was $145.0 million, or 5.14 percent of total gross loans (66.19 percent of total non-performing loans), compared to $71.0 million, or 2.11 percent of total gross loans (58.23 percent of total non-performing loans), at December 31, 2008. At September 30, 2009, the allowance for loan losses was $124.8 million, or 4.19 percent of total gross loans (71.53 percent of total non-performing loans). The increase in the allowance for loan losses was mainly due to an increase in quantitative reserves to $90.1 million from $61.1 million at September 30, 2009. The increase in the quantitative allowance was partially offset by a decrease in impaired reserves to $23.1 million from $36.7 million at September 30, 2009 as a result of increased charge-offs. Qualitative allowance slightly increased to $31.6 million from $26.6 million at the end of the third quarter.
Delinquent loans were $186.3 million (6.60 percent of total gross loans) at December 31, 2009, compared to $151.0 million (5.07 percent of total gross loans) at September 30, 2009, and $128.5 million (3.82 percent of total gross loans) at December 31, 2008. Contributing to the increase in delinquent loans were an increase in delinquencies of owner-occupied business property loans as well as an increase in delinquencies of SBA loans. Delinquencies from these two loan categories increased by approximately $18.0 million and $13.5 million, respectively, quarter-over-quarter.
Non-performing loans (“NPL”) at December 31, 2009 were $219.1 million (7.77 percent of total gross loans), compared with $174.4 million at September 30, 2009 (5.85 percent of total gross loans), and $121.9 million (3.62 percent of total gross loans) at December 31, 2008. The majority of the quarter-over-quarter increase in non-performing loans is attributable to an increase of approximately $20.7 million in NPLs from income-producing commercial property loans, and an increase of approximately $17.8 million in NPLs from owner-occupied business property loans. Non-performing SBA loans also increased by approximately $7.5 million compared to the prior quarter. Non-performing loans at December 31, 2009 consisted of 5.7 percent construction loans, 46.9 percent commercial and industrial (“C&I”) loans including owner/user occupied business property loans, 26.9 percent CRE loans, 16.3 percent SBA loans, 3.0 percent consumer loans, and the remaining 1.2 percent consisting of commercial lines of credit and international loans. Of the total NPL of $219.1 million, $74.0 million, or 33.8 percent, is current

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at December 31, 2009. Of the total NPL of $174.4 million, $51.9 million, or 29.8%, was current at September 30, 2009. Of the current NPL of $74.0 million, $35.7 million was moved to non-accrual status from accrual status due to shortfalls in collateral with negative cash flow; and of the $35.7 million that moved to non-accrual status, $7.9 million was restructured and identified as troubled debt restructured loans.
As of December 31, 2009, total non-performing assets of $245.4 million included other real estate owned assets (“OREO”) of $26.3 million compared with total non-performing assets of $201.6 million with OREO of $27.1 million at September 30, 2009, and total non-performing assets of $122.7 million with OREO of $823,000 at December 31, 2008.
The aggregate net OREO balance has shown a decreasing trend since the second quarter of 2009. The net balance decreased from $34.0 million at June 30, 2009 to $27.1 million at September 30, 2009. The balance further decreased to $26.3 million at December 31, 2009.
Capital Adequacy
The Bank’s capital ratios exceed levels defined as “adequately capitalized” by our regulators. At December 31, 2009, the Bank’s Tier 1 Leverage, Tier 1 Risk-Based Capital and Total Risk-Based Capital Ratio were 6.69 percent, 7.77 percent, and 9.07 percent, respectively, compared to 7.05 percent, 8.40 percent and 9.69 percent, respectively, at September 30, 2009. The Bank’s ratio of tangible shareholders’ equity to total tangible assets for the fourth quarter was 7.13 percent compared to 7.57 percent at September 30, 2009.
About Hanmi Financial Corporation
Headquartered in Los Angeles, Hanmi Bank, a wholly-owned subsidiary of Hanmi Financial Corporation, provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. Hanmi Bank specializes in commercial, SBA and trade finance lending, and is a recognized community leader. Hanmi Bank’s mission is to provide a full range of quality products and premier services to its customers and to maximize shareholder value. Additional information is available at www.hanmi.com.
Forward-Looking Statements
This release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statement. These factors include the following: failure to maintain adequate levels of capital and liquidity to support our operations; the effect of

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regulatory orders we have entered into and potential future supervisory action against us or Hanmi Bank; general economic and business conditions internationally, nationally and in those areas in which we operate; volatility and deterioration in the credit and equity markets; changes in consumer spending, borrowing and savings habits; availability of capital from private and government sources; demographic changes; competition for loans and deposits and failure to attract or retain loans and deposits; fluctuations in interest rates and a decline in the level of our interest rate spread; risks of natural disasters related to our real estate portfolio; risks associated with Small Business Administration (“SBA”) loans; failure to attract or retain key employees; changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums; ability to receive regulatory approval for Hanmi Bank to declare dividends to Hanmi Financial; adequacy of our allowance for loan losses, credit quality and the effect of credit quality on our provision for credit losses and allowance for loan losses; changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements; our ability to successfully integrate acquisitions we may make; our ability to control expenses; and changes in securities markets. In addition, we set forth certain risks in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and current and periodic reports filed with the Securities and Exchange Commission thereafter, which could cause actual results to differ from those projected. You should understand that it is not possible to predict or identify all such risks. Consequently, you should not consider such disclosures to be a complete discussion of all potential risks or uncertainties. We undertake no obligation to update such forward-looking statements except as required by law.
Contact
Hanmi Financial Corporation
     
BRIAN E. CHO
  DAVID YANG
Chief Financial Officer
  Investor Relations and Corporate Planning
(213) 368-3200
  (213) 637-4798 
(financial tables follow)

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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
                                         
    December 31,     September 30,     %     December 31,     %  
    2009     2009     Change     2008     Change  
ASSETS
                                        
 
                                        
Cash and Due from Banks
   $ 55,263     $ 57,727       (4.3 )%   $ 83,933       (34.2 )%
Interest-Bearing Deposits in Other Banks
     98,847       155,607       (36.5 )%     2,014       4,808.0 %
Federal Funds Sold
     —       —       —       130,000       (100.0 )%
 
                              
 
                                        
Cash and Cash Equivalents
     154,110       213,334       (27.8 )%     215,947       (28.6 )%
 
                              
 
                                        
Investment Securities
     133,289       205,901       (35.3 )%     197,117       (32.4 )%
 
                                        
Loans:
                                        
Gross Loans, Net of Deferred Loan Fees
     2,819,060       2,977,504       (5.3 )%     3,362,111       (16.2 )%
Allowance for Loan Losses
     (144,996 )     (124,768 )     16.2 %     (70,986 )     104.3 %
 
                              
 
                                        
Loans Receivable, Net
     2,674,064       2,852,736       (6.3 )%     3,291,125       (18.7 )%
 
                              
 
                                        
Due from Customers on Acceptances
     994       1,859       (46.5 )%     4,295       (76.9 )%
Premises and Equipment, Net
     18,657       19,302       (3.3 )%     20,279       (8.0 )%
Accrued Interest Receivable
     9,492       11,389       (16.7 )%     12,347       (23.1 )%
Other Real Estate Owned, Net
     26,306       27,140       (3.1 )%     823       3,096.4 %
Deferred Income Taxes, Net
     —       2,464       (100.0 )%     29,456       (100.0 )%
Servicing Assets
     3,842       3,957       (2.9 )%     3,791       1.3 %
Other Intangible Assets, Net
     3,382       3,736       (9.5 )%     4,950       (31.7 )%
Investment in Federal Home Loan Bank Stock, at Cost
     30,697       30,697       —       30,697       —  
Investment in Federal Reserve Bank Stock, at Cost
     7,878       10,053       (21.6 )%     10,228       (23.0 )%
Bank-Owned Life Insurance
     26,408       26,171       0.9 %     25,476       3.7 %
Income Taxes Receivable
     60,162       34,908       72.3 %     11,712       413.7 %
Other Assets
     13,425       13,843       (3.0 )%     17,573       (23.6 )%
 
                              
 
                                        
TOTAL ASSETS
   $ 3,162,706     $ 3,457,490       (8.5 )%   $ 3,875,816       (18.4 )%
 
                              
 
                                        
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                        
 
                                        
Liabilities:
                                        
Deposits:
                                        
Noninterest-Bearing
   $ 556,306     $ 561,548       (0.9 )%   $ 536,944       3.6 %
Interest-Bearing
     2,193,021       2,430,312       (9.8 )%     2,533,136       (13.4 )%
 
                              
 
                                        
Total Deposits
     2,749,327       2,991,860       (8.1 )%     3,070,080       (10.4 )%
 
                                        
Accrued Interest Payable
     12,606       19,730       (36.1 )%     18,539       (32.0 )%
Bank Acceptances Outstanding
     994       1,859       (46.5 )%     4,295       (76.9 )%
Federal Home Loan Bank Advances
     153,978       160,828       (4.3 )%     422,196       (63.5 )%
Other Borrowings
     1,747       1,496       16.8 %     787       122.0 %
Junior Subordinated Debentures
     82,406       82,406       —       82,406       —  
Accrued Expenses and Other Liabilities
     11,904       12,191       (2.4 )%     13,598       (12.5 )%
 
                              
 
                                        
Total Liabilities
     3,012,962       3,270,370       (7.9 )%     3,611,901       (16.6 )%
 
                                        
Stockholders’ Equity
     149,744       187,120       (20.0 )%     263,915       (43.3 )%
 
                              
 
                                        
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 3,162,706     $ 3,457,490       (8.5 )%   $ 3,875,816       (18.4 )%
 
                              

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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
                                                                 
    Three Months Ended     Year Ended  
    Dec. 31,     Sept. 30,     %     Dec. 31,     %     Dec. 31,     Dec. 31,     %  
    2009     2009     Change     2008     Change     2009     2008     Change  
INTEREST AND DIVIDEND INCOME:
                                                                
Interest and Fees on Loans
   $ 40,810     $ 42,705       (4.4 )%   $ 51,305       (20.5 )%   $ 173,318     $ 223,942       (22.6 )%
Taxable Interest on Investment Securities
     1,414       1,541       (8.2 )%     1,644       (14.0 )%     5,675       9,387       (39.5 )%
Tax-Exempt Interest on Investment Securities
     432       607       (28.8 )%     646       (33.1 )%     2,303       2,717       (15.2 )%
Interest on Term Federal Funds Sold
     30       293       (89.8 )%     43       (30.2 )%     1,718       43       3,895.3 %
Dividends on Federal Reserve Bank Stock
     136       150       (9.3 )%     164       (17.1 )%     592       692       (14.5 )%
Interest on Federal Funds Sold and Securities Purchased Under Resale Agreements
     65       67       (3.0 )%     29       124.1 %     326       166       96.4 %
Interest on Interest-Bearing Deposits in Other Banks
     70       68       2.9 %     5       1,300.0 %     151       10       1,410.0 %
Dividends on Federal Home Loan Bank Stock
     —       64       (100.0 )%     273       (100.0 )%     64       1,226       (94.8 )%
 
                                                
Total Interest and Dividend Income
     42,957       45,495       (5.6 )%     54,109       (20.6 )%     184,147       238,183       (22.7 )%
 
                                                
INTEREST EXPENSE:
                                                                
Interest on Deposits
     13,410       17,365       (22.8 )%     19,654       (31.8 )%     76,246       84,353       (9.6 )%
Interest on Federal Home Loan Bank Advances
     412       865       (52.4 )%     2,621       (84.3 )%     3,399       14,027       (75.8 )%
Interest on Junior Subordinated Debentures
     690       747       (7.6 )%     1,293       (46.6 )%     3,271       5,056       (35.3 )%
Interest on Other Borrowings
     —       —       —       2       (100.0 )%     2       346       (99.4 )%
 
                                                
Total Interest Expense
     14,512       18,977       (23.5 )%     23,570       (38.4 )%     82,918       103,782       (20.1 )%
 
                                                
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES
     28,445       26,518       7.3 %     30,539       (6.9 )%     101,229       134,401       (24.7 )%
Provision for Credit Losses
     77,000       49,500       55.6 %     25,450       202.6 %     196,387       75,676       159.5 %
 
                                                
NET INTEREST INCOME (LOSS) AFTER PROVISION FOR CREDIT LOSSES
     (48,555 )     (22,982 )     111.3 %     5,089       (1,054.1 )%     (95,158 )     58,725       (262.0 )%
 
                                                
NON-INTEREST INCOME:
                                                                
Service Charges on Deposit Accounts
     4,022       4,275       (5.9 )%     4,559       (11.8 )%     17,054       18,463       (7.6 )%
Insurance Commissions
     1,062       1,063       (0.1 )%     1,174       (9.5 )%     4,492       5,067       (11.3 )%
Remittance Fees
     530       511       3.7 %     651       (18.6 )%     2,109       2,194       (3.9 )%
Trade Finance Fees
     439       512       (14.3 )%     614       (28.5 )%     1,956       3,088       (36.7 )%
Other Service Charges and Fees
     371       489       (24.1 )%     513       (27.7 )%     1,810       2,365       (23.5 )%
Net Gain on Sales of Loans
     354       864       (59.0 )%     —       —       1,220       765       59.5 %
Bank-Owned Life Insurance Income
     237       234       1.3 %     237       —       932       952       (2.1 )%
Gain on Sales of Investment Securities
     1,050       —       —       —       —       2,327       618       276.5 %
Loss on Sales of Investment Securities
     (385 )     —       —       (58 )     563.8 %     (494 )     (541 )     (8.7 )%
Other-Than-Temporary Impairment Loss on Investment Securities
     —       —       —       —       —       —       (2,410 )     (100.0 )%
Other Operating Income (Loss)
     159       265       (40.0 )%     (286 )     (155.6 )%     704       1,588       (55.7 )%
 
                                                
Total Non-Interest Income
     7,839       8,213       (4.6 )%     7,404       5.9 %     32,110       32,149       (0.1 )%
 
                                                
NON-INTEREST EXPENSE:
                                                                
Salaries and Employee Benefits
     8,442       8,648       (2.4 )%     8,846       (4.6 )%     33,101       42,209       (21.6 )%
Occupancy and Equipment
     2,733       2,834       (3.6 )%     2,798       (2.3 )%     11,239       11,158       0.7 %
Deposit Insurance Premiums and Regulatory Assessments
     2,998       2,001       49.8 %     1,615       85.6 %     10,418       3,713       180.6 %
Data Processing
     1,606       1,608       (0.1 )%     1,069       50.2 %     6,297       5,799       8.6 %
Other Real Estate Owned Expense
     873       3,372       (74.1 )%     249       250.6 %     5,890       390       1,410.3 %
Professional Fees
     1,354       1,239       9.3 %     912       48.5 %     4,099       3,539       15.8 %
Advertising and Promotion
     762       447       70.5 %     904       (15.7 )%     2,402       3,518       (31.7 )%
Supplies and Communications
     580       603       (3.8 )%     510       13.7 %     2,352       2,518       (6.6 )%
Loan-Related Expense
     357       192       85.9 %     221       61.5 %     1,947       790       146.5 %
Amortization of Other Intangible Assets
     354       379       (6.6 )%     454       (22.0 )%     1,568       1,958       (19.9 )%
Other Operating Expenses
     2,651       2,366       12.0 %     3,478       (23.8 )%     11,041       11,337       (2.6 )%
Impairment Loss on Goodwill
     —       —       —       —       —       —       107,393       (100.0 )%
 
                                                
Total Non-Interest Expense
     22,710       23,689       (4.1 )%     21,056       7.9 %     90,354       194,322       (53.5 )%
 
                                                
LOSS BEFORE PROVISION (BENEFIT) FOR INCOME TAXES
     (63,426 )     (38,458 )     64.9 %     (8,563 )     640.7 %     (153,402 )     (103,448 )     48.3 %
Provision (Benefit) for Income Taxes
     (27,545 )     21,207       (229.9 )%     (4,748 )     480.1 %     (31,125 )     (1,355 )     2,197.0 %
 
                                                
NET LOSS
   $ (35,881 )   $ (59,665 )     (39.9 )%   $ (3,815 )     840.5 %   $ (122,277 )   $ (102,093 )     19.8 %
 
                                                
 
                                                                
LOSS PER SHARE:
                                                                
Basic
   $ (0.70 )   $ (1.26 )     (44.4 )%   $ (0.08 )     775.0 %   $ (2.57 )   $ (2.23 )     15.2 %
Diluted
   $ (0.70 )   $ (1.26 )     (44.4 )%   $ (0.08 )     775.0 %   $ (2.57 )   $ (2.23 )     15.2 %
 
                                                                
WEIGHTED-AVERAGE SHARES OUTSTANDING:
                                                                
Basic
     50,998,103       47,413,141               45,884,462               47,570,361       45,872,541          
Diluted
     50,998,103       47,413,141               45,884,462               47,570,361       45,872,541          
 
                                                                
SHARES OUTSTANDING AT PERIOD-END
     51,182,390       51,201,390               45,905,549               51,182,390       45,905,549          

- 7 -

 

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in Thousands)
                                                                   
    Three Months Ended     Year Ended  
    December 31,     September 30,     %     December 31,     %     December 31,     December 31,     %  
    2009     2009     Change     2008     Change     2009     2008     Change  
AVERAGE BALANCES:
                                                                
Average Gross Loans, Net of Deferred Loan Fees
   $ 2,924,722     $ 3,078,104       (5.0 )%   $ 3,366,601       (13.1 )%   $ 3,157,133     $ 3,332,133       (5.3 )%
Average Investment Securities
     182,635       209,021       (12.6 )%     205,305       (11.0 )%     188,325       271,802       (30.7 )%
Average Interest-Earning Assets
     3,291,042       3,552,698       (7.4 )%     3,637,232       (9.5 )%     3,611,009       3,653,720       (1.2 )%
Average Total Assets
     3,356,383       3,672,253       (8.6 )%     3,789,435       (11.4 )%     3,717,179       3,866,856       (3.9 )%
Average Deposits
     2,914,794       3,100,419       (6.0 )%     2,879,674       1.2 %     3,109,322       2,913,171       6.7 %
Average Borrowings
     244,704       297,455       (17.7 )%     602,838       (59.4 )%     341,514       591,930       (42.3 )%
Average Interest-Bearing Liabilities
     2,598,520       2,844,821       (8.7 )%     2,913,723       (10.8 )%     2,909,014       2,874,470       1.2 %
Average Stockholders’ Equity
     164,767       232,136       (29.0 )%     271,544       (39.3 )%     225,708       323,462       (30.2 )%
Average Tangible Equity
     161,169       228,169       (29.4 )%     266,333       (39.5 )%     221,537       264,490       (16.2 )%
 
                                                                
PERFORMANCE RATIOS (Annualized):
                                                                
Return on Average Assets
     (4.24 )%     (6.45 )%             (0.40 )%             (3.29 )%     (2.64 )%        
Return on Average Stockholders’ Equity
     (86.40 )%     (101.97 )%             (5.59 )%             (54.17 )%     (31.56 )%        
Return on Average Tangible Equity
     (88.33 )%     (103.75 )%             (5.70 )%             (55.19 )%     (38.60 )%        
Efficiency Ratio
     62.59 %     68.21 %             55.49 %             67.76 %     116.67 %        
Net Interest Spread (1)
     2.99 %     2.47 %             2.74 %             2.28 %     2.95 %        
Net Interest Margin (1)
     3.46 %     3.00 %             3.38 %             2.84 %     3.72 %        
 
                                                                
ALLOWANCE FOR LOAN LOSSES:
                                                                
Balance at Beginning of Period
   $ 124,768     $ 105,268       18.5 %   $ 63,948       95.1 %   $ 70,986     $ 43,611       62.8 %
Provision Charged to Operating Expense
     77,540       49,375       57.0 %     25,660       202.2 %     196,607       73,345       168.1 %
Charge-Offs, Net of Recoveries
     (57,312 )     (29,875 )     91.8 %     (18,622 )     207.8 %     (122,597 )     (45,970 )     166.7 %
 
                                                
Balance at End of Period
   $ 144,996     $ 124,768       16.2 %   $ 70,986       104.3 %   $ 144,996     $ 70,986       104.3 %
 
                                                
 
                                                                
Allowance for Loan Losses to Total Gross Loans
     5.14 %     4.19 %             2.11 %             5.14 %     2.11 %        
Allowance for Loan Losses to Total Non-Performing Loans
     66.19 %     71.53 %             58.23 %             66.19 %     58.23 %        
 
                                                                
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS:
                                                                
Balance at Beginning of Period
   $ 4,416     $ 4,291       2.9 %   $ 4,306       2.6 %   $ 4,096     $ 1,765       132.1 %
Provision Charged to Operating Expense
     (540 )     125       (532.0 )%     (210 )     153.3 %     (220 )     2,331       (109.4 )%
 
                                                
Balance at End of Period
   $ 3,876     $ 4,416       (12.2 )%   $ 4,096       (5.4 )%   $ 3,876     $ 4,096       (5.4 )%
 
                                                
 
(1)   Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.

- 8 -

 

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED) (Continued)
(Dollars in Thousands)
                                         
    December 31,     September 30,     %     December 31,     %  
    2009     2009     Change     2008     Change  
NON-PERFORMING ASSETS:
                                        
Non-Accrual Loans
   $ 219,000     $ 174,363       25.6 %   $ 120,823       81.3 %
Loans 90 Days or More Past Due and Still Accruing
     67       64       4.7 %     1,075       (93.8 )%
 
                              
Total Non-Performing Loans
     219,067       174,427       25.6 %     121,898       79.7 %
Other Real Estate Owned, Net
     26,306       27,140       (3.1 )%     823       3,096.4 %
 
                              
Total Non-Performing Assets
   $ 245,373     $ 201,567       21.7 %   $ 122,721       99.9 %
 
                              
 
                                        
Total Non-Performing Loans/Total Gross Loans
     7.77 %     5.85 %             3.62 %        
Total Non-Performing Assets/Total Assets
     7.76 %     5.83 %             3.17 %        
Total Non-Performing Assets/Allowance for Loan Losses
     169.2 %     161.6 %             172.9 %        
 
                                        
DELINQUENT LOANS
   $ 186,257     $ 151,047       23.3 %   $ 128,469       45.0 %
 
                              
 
                                        
Delinquent Loans/Total Gross Loans
     6.60 %     5.07 %             3.82 %        
 
                                        
LOAN PORTFOLIO:
                                        
Real Estate Loans
   $ 1,043,097     $ 1,086,735       (4.0 )%   $ 1,180,114       (11.6 )%
Commercial and Industrial Loans
     1,714,212       1,824,042       (6.0 )%     2,099,732       (18.4 )%
Consumer Loans
     63,303       68,537       (7.6 )%     83,525       (24.2 )%
 
                              
Total Gross Loans
     2,820,612       2,979,314       (5.3 )%     3,363,371       (16.1 )%
Deferred Loan Fees
     (1,552 )     (1,810 )     (14.3 )%     (1,260 )     23.2 %
 
                              
Gross Loans, Net of Deferred Loan Fees
     2,819,060       2,977,504       (5.3 )%     3,362,111       (16.2 )%
Allowance for Loan Losses
     (144,996 )     (124,768 )     16.2 %     (70,986 )     104.3 %
 
                              
Loans Receivable, Net
   $ 2,674,064     $ 2,852,736       (6.3 )%   $ 3,291,125       (18.7 )%
 
                              
 
                                        
LOAN MIX:
                                        
Real Estate Loans
     37.0 %     36.5 %             35.1 %        
Commercial and Industrial Loans
     60.8 %     61.2 %             62.4 %        
Consumer Loans
     2.2 %     2.3 %             2.5 %        
 
                                  
Total Gross Loans
     100.0 %     100.0 %             100.0 %        
 
                                  
 
                                        
DEPOSIT PORTFOLIO:
                                        
Demand — Noninterest-Bearing
   $ 556,306     $ 561,548       (0.9 )%   $ 536,944       3.6 %
Savings
     111,172       98,019       13.4 %     81,869       35.8 %
Money Market Checking and NOW Accounts
     685,858       723,585       (5.2 )%     370,401       85.2 %
Time Deposits of $100,000 or More
     815,190       845,318       (3.6 )%     849,800       (4.1 )%
Other Time Deposits
     580,801       763,390       (23.9 )%     1,231,066       (52.8 )%
 
                              
Total Deposits
   $ 2,749,327     $ 2,991,860       (8.1 )%   $ 3,070,080       (10.4 )%
 
                              
 
                                        
DEPOSIT MIX:
                                        
Demand — Noninterest-Bearing
     20.2 %     18.8 %             17.5 %        
Savings
     4.0 %     3.3 %             2.7 %        
Money Market Checking and NOW Accounts
     24.9 %     24.2 %             12.1 %        
Time Deposits of $100,000 or More
     29.7 %     28.3 %             27.7 %        
Other Time Deposits
     21.2 %     25.4 %             40.0 %        
 
                                  
Total Deposits
     100.0 %     100.0 %             100.0 %        
 
                                  
 
                                        
CAPITAL RATIOS (Bank Only):
                                        
Total Risk-Based
     9.07 %     9.69 %             10.71 %        
Tier 1 Risk-Based
     7.77 %     8.40 %             9.44 %        
Tier 1 Leverage
     6.69 %     7.05 %             8.85 %        

- 9 -

 

HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID (UNAUDITED)
(Dollars in Thousands)
                                                                                                                         
    Three Months Ended     Year Ended  
    December 31, 2009     September 30, 2009     December 31, 2008     December 31, 2009     December 31, 2008  
            Interest     Average             Interest     Average             Interest     Average             Interest     Average             Interest     Average  
    Average     Income/     Yield/     Average     Income/     Yield/     Average     Income/     Yield/     Average     Income/     Yield/     Average     Income/     Yield/  
    Balance     Expense     Rate     Balance     Expense     Rate     Balance     Expense     Rate     Balance     Expense     Rate     Balance     Expense     Rate  
INTEREST-EARNING ASSETS
                                                                                                                        
Loans:
                                                                                                                        
Real Estate Loans:
                                                                                                                        
Commercial Property
   $ 861,831     $ 11,872       5.47 %   $ 887,028     $ 12,051       5.39 %   $ 902,367     $ 14,074       6.20 %   $ 894,408     $ 49,901       5.58 %   $ 841,526     $ 56,968       6.77 %
Construction
     130,400       1,342       4.08 %     138,340       1,464       4.20 %     186,080       1,881       4.02 %     156,619       5,947       3.80 %     202,879       9,962       4.91 %
Residential Property
     80,257       997       4.93 %     83,387       1,050       5.00 %     91,366       1,174       5.11 %     85,228       4,329       5.08 %     90,395       4,758       5.26 %
 
                                                                                          
Total Real Estate Loans
     1,072,488       14,211       5.26 %     1,108,755       14,565       5.21 %     1,179,813       17,129       5.78 %     1,136,255       60,177       5.30 %     1,134,800       71,688       6.32 %
Commercial and Industrial Loans
     1,787,795       25,472       5.65 %     1,897,321       26,863       5.62 %     2,104,820       32,691       6.18 %     1,947,669       108,346       5.56 %     2,112,421       145,107       6.87 %
Consumer Loans
     66,074       965       5.79 %     73,670       1,084       5.84 %     83,411       1,353       6.45 %     74,700       4,310       5.77 %     86,787       6,142       7.08 %
 
                                                                                          
Total Gross Loans
     2,926,357       40,648       5.51 %     3,079,746       42,512       5.48 %     3,368,044       51,173       6.04 %     3,158,624       172,833       5.47 %     3,334,008       222,937       6.69 %
Prepayment Penalty Income
     —       162       —       —       193       —       —       132       —       —       485       —       —       1,005       —  
Unearned Income on Loans, Net of Costs
     (1,635 )     —       —       (1,642 )     —       —       (1,443 )     —       —       (1,491 )     —       —       (1,875 )     —       —  
 
                                                                                          
Gross Loans, Net
     2,924,722       40,810       5.54 %     3,078,104       42,705       5.50 %     3,366,601       51,305       6.06 %     3,157,133       173,318       5.49 %     3,332,133       223,942       6.72 %
 
                                                                                          
 
                                                                                                                        
Investment Securities:
                                                                                                                        
Municipal Bonds (1)
     41,653       665       6.39 %     58,179       933       6.41 %     59,718       994       6.66 %     54,448       3,543       6.51 %     63,918       4,180       6.54 %
U.S. Government Agency Securities
     36,500       437       4.79 %     37,969       431       4.54 %     21,720       201       3.70 %     24,417       1,108       4.54 %     65,440       2,813       4.35 %
Mortgage-Backed Securities
     77,354       738       3.82 %     82,429       807       3.92 %     79,821       971       4.87 %     77,627       3,320       4.28 %     87,930       4,217       4.77 %
Collateralized Mortgage Obligations
     14,312       143       4.00 %     17,066       173       4.05 %     37,853       403       4.26 %     21,365       879       4.11 %     43,842       1,865       4.25 %
Corporate Bonds
     286       —       0.00 %     401       —       0.00 %     1,688       46       10.90 %     271       —       0.00 %     6,671       333       4.59 %
Other Securities
     12,530       97       3.10 %     12,977       130       4.01 %     4,505       23       2.04 %     10,197       369       3.62 %     4,001       159       4.73 %
 
                                                                                          
Total Investment Securities (1)
     182,635       2,080       4.56 %     209,021       2,474       4.73 %     205,305       2,638       5.14 %     188,325       9,219       4.90 %     271,802       13,567       4.99 %
 
                                                                                          
 
                                                                                                                        
Other Interest-Earning Assets:
                                                                                                                        
Equity Securities
     40,605       136       1.34 %     41,741       214       2.05 %     42,551       437       4.11 %     41,399       656       1.58 %     38,516       1,918       4.98 %
Federal Funds Sold and Securities Purchased
                                                                                                                        
Under Resale Agreements
     51,713       65       0.50 %     56,568       67       0.47 %     14,410       29       0.80 %     84,363       326       0.39 %     8,934       166       1.86 %
Term Federal Funds Sold
     8,500       30       1.41 %     90,239       293       1.30 %     7,609       43       2.26 %     95,822       1,718       1.79 %     1,913       43       2.25 %
Interest-Bearing Deposits in Other Banks
     82,867       70       0.34 %     77,025       68       0.35 %     756       5       2.65 %     43,967       151       0.34 %     422       10       2.37 %
 
                                                                                          
Total Other Interest-Earning Assets
     183,685       301       0.66 %     265,573       642       0.97 %     65,326       514       3.15 %     265,551       2,851       1.07 %     49,785       2,137       4.29 %
 
                                                                                          
 
                                                                                                                        
TOTAL INTEREST-EARNING ASSETS (1)
   $ 3,291,042     $ 43,191       5.21 %   $ 3,552,698     $ 45,821       5.12 %   $ 3,637,232     $ 54,457       5.96 %   $ 3,611,009     $ 185,388       5.13 %   $ 3,653,720     $ 239,646       6.56 %
 
                                                                                          
 
                                                                                                                        
INTEREST-BEARING LIABILITIES
                                                                                                                        
Interest-Bearing Deposits:
                                                                                                                        
Savings
   $ 104,068     $ 711       2.71 %   $ 93,404     $ 585       2.48 %   $ 83,777     $ 506       2.40 %   $ 91,089     $ 2,328       2.56 %   $ 89,866     $ 2,093       2.33 %
Money Market Checking and NOW Accounts
     733,063       3,508       1.90 %     629,124       2,998       1.89 %     506,062       3,963       3.12 %     507,619       9,786       1.93 %     618,779       19,909       3.22 %
Time Deposits of $100,000 or More
     835,726       4,930       2.34 %     983,341       7,447       3.00 %     754,081       8,162       4.31 %     1,051,994       34,807       3.31 %     1,045,968       43,598       4.17 %
Other Time Deposits
     680,959       4,261       2.48 %     841,497       6,335       2.99 %     966,965       7,023       2.89 %     916,798       29,325       3.20 %     527,927       18,753       3.55 %
 
                                                                                          
Total Interest-Bearing Deposits
     2,353,816       13,410       2.26 %     2,547,366       17,365       2.70 %     2,310,885       19,654       3.38 %     2,567,500       76,246       2.97 %     2,282,540       84,353       3.70 %
 
                                                                                          
 
                                                                                                                        
Borrowings:
                                                                                                                        
FHLB Advances
     160,754       412       1.02 %     213,583       865       1.61 %     518,058       2,620       2.01 %     257,529       3,399       1.32 %     498,875       14,026       2.81 %
Other Borrowings
     1,544       —       0.00 %     1,466       —       0.00 %     2,374       3       0.50 %     1,579       2       0.13 %     10,649       347       3.26 %
Junior Subordinated Debentures
     82,406       690       3.32 %     82,406       747       3.60 %     82,406       1,293       6.24 %     82,406       3,271       3.97 %     82,406       5,056       6.14 %
 
                                                                                          
Total Borrowings
     244,704       1,102       1.79 %     297,455       1,612       2.15 %     602,838       3,916       2.58 %     341,514       6,672       1.95 %     591,930       19,429       3.28 %
 
                                                                                          
 
                                                                                                                        
TOTAL INTEREST-BEARING LIABILITIES
   $ 2,598,520     $ 14,512       2.22 %   $ 2,844,821     $ 18,977       2.65 %   $ 2,913,723     $ 23,570       3.22 %   $ 2,909,014     $ 82,918       2.85 %   $ 2,874,470     $ 103,782       3.61 %
 
                                                                                          
 
                                                                                                                        
NET INTEREST INCOME (1)
           $ 28,679                     $ 26,844                     $ 30,887                     $ 102,470                     $ 135,864          
 
                                                                                                              
 
                                                                                                                        
NET INTEREST SPREAD (1)
                     2.99 %                     2.47 %                     2.74 %                     2.28 %                     2.95 %
 
                                                                                                              
 
                                                                                                                        
NET INTEREST MARGIN (1)
                     3.46 %                     3.00 %                     3.38 %                     2.84 %                     3.72 %
 
                                                                                                              
 
(1)   Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.

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